Boom for taking cash out of homes

THOUSANDS of baby boomers who came of age in the 1960s and 70s are signing away homes through lifetime mortgages which can leave their children with nothing to inherit.

Savings firm Legal & General has seen a surge in demand for the products, which allows owners to borrow cash against the value of their house and repay it after they die, plus interest.

But experts warn sky-high interest rates often mean that the value of the house is swallowed up, so the next generation loses everything – a situation that can spark family disputes.

L&G has lent £900m in lifetime mortgages since the start of 2017 – 71pc up on this time in 2016 – and believes there is room for growth.

More than 18,000 people signed over a portion of their homes in exchange for cash in the three months to September 30, says the Equity Release Council.

When banks demand final repayment on interest-only mortgages, equity release is the only way for many to keep their home. L&G said overall sales in its retirement arm have hit £6.2bn.